A significant percentage of marriages end in divorce, and in most cases these divorced individuals have children. Most people who do in fact get divorced eventually remarry. It should be mentioned that second and third marriages fail at a higher rate than first marriages.
In fact, most second and third marriages end in divorce.
The above facts raise some profound estate planning questions. What should you do if you are a divorced parent who decides to get remarried?
From the start statistics indicate that there is a very good chance that the marriage will not last. If you simply allow your assets to merge with those of your new spouse you are certainly taking a leap of faith when it comes to your own financial well-being.
You are also trusting that your spouse would take adequate care of your children financially if you were to die first.
One way that this type of situation can be addressed would be through the execution of a premarital agreement followed by the creation of a qualified terminable interest property trust or QTIP trust.
Once your personal assets have been delineated via the execution of the prenuptial agreement you place resources into the trust. If you predecease your spouse he or she will be able to receive distributions out of the trust for life.
However, your surviving spouse will not be able to decide who inherits the remainder. You select this beneficiary when you draw up the terms of the trust, and this would be your children if your intention was to protect their interests.
- Attorneys Want to Help - December 14, 2016
- Trusts and the Estate Tax - December 14, 2016
- What Is a Third Party Special Needs Trust? - December 14, 2016